How Operational Efficiency Is Good For Everyone at the Institution

Operational efficiency in higher education can prove to be beneficial on both the back-end, operational side and on the front-end, academic side of the institution.The following interview is with Cathy Sandeen, vice-president for education attainment and innovation at the American Council on Education. The higher education space is in flux and institutions are trying to become leaner while also improving their level of service. While a number of institutions are focusing on ways they can improve their operational efficiency to achieve this goal, many stakeholders across the higher education space have trouble envisioning what that efficiency actually looks like. In this interview, Sandeen sheds some light on the value of efficiency for stakeholders across the postsecondary institution.

1. What does operational efficiency mean for higher education leaders and executives?

Typically, we think about operational efficiency as being the back-office business operations — billing, human resources, information technology, systems, all of that. But I don’t necessarily segregate those completely from academic operations. The two are intertwined and there’s opportunity for efficiencies across the board.

The most important thing for us to do is to focus on what we’re trying to achieve. Our outcomes are to help students learn, achieve and complete degrees and credentials and then we back up from there. What are all the things we can do to make that process better and more efficient? I’d like to see higher education leaders looking at the whole picture but definitely looking at some of the back-office operations and ways we can be leaner, more efficient and deploy people in areas that actually add value to the student experience.

2. What are a few of the most significant misconceptions that internal stakeholders — faculty and staff — typically hold about efficiency in the postsecondary context?

When we’re talking about changing things and we’re talking about efficiency, looking at our processes and streamlining those processes, we’re looking at bringing in technology that also forces the question of changing our business roles, our business processes. We’re talking about maybe partnering with outside organizations or maybe going to collaborate with other institutions on certain things we do. This is all change, and change is threatening to people. The first thing that staff and faculty think is, “You’re telling me what I’m doing is wrong.” It’s really important for leaders to nip that in the bud and say that change is being driven by external forces. We’re probably not going to be able to increase our funding dramatically. If we’re a public institution or even a private institution, there are limits to which we can raise our tuition. We need to figure out how we can obtain greater cost savings. We need to work together to figure out how we can change and do things differently. It’s not saying we’re doing things wrong in the past; it’s just how we can do things better in the future.

Also, there’s a misconception that if we systemize, streamline, economize, add systems in, we’re going to be eliminating jobs, and that’s not always the case. What we’re doing is freeing up time to devote to other mission-critical activities. The notion of technology replacing people is a misconception leaders need to address at the beginning of a change process. Maybe faculty are not as aware of all the complexities that go into running and managing a complex higher education institution today. For example, our information technology infrastructure is much bigger and more robust than it has been in the past and that requires us to have a large number of highly-paid professionals to help us run it. We also have a high-level of compliance we must deal with, and again this requires staffing.

There are some misconceptions about what’s involved in operating an institution and the degree to which we can cut and slash on the operational side and still deliver the services we’re required to deliver within the environment we’re currently operating in.

3. On the flip side, what are a few of the most significant misconceptions external stakeholders — business leaders and government officials — typically hold about operational efficiency in higher education?

There’s a misconception that there’s opportunity for dramatic and huge cost saving by streaming or working on the operations of an institution. There are cost savings that can be achieved [and] there are efficiencies that can be achieved, all in the effort of increasing our ultimate goal, that is, student learning and student achievement of credentials and degrees. The amount of that saving is sometimes overestimated and the speed at which we would be able to enable changes is often overestimated.

4. How can operational efficiency help higher education institutions remain viable and grow?

The degree to which we’re able to serve more students and help them progress in a timely fashion toward their degrees and credentials will allow us to expand enrollments, and that will increase revenues. Overall, this will create a more financially sustainable institution, one operating at peak efficiency. [This will also allow us to] have some investment capital, R&D funding, in order to try innovative new practices.

Operational efficiencies and systems and so forth can help us. I’d also point to the importance of all the data we’re now collecting from different places and our ability to analyze this data and to identify places [where] we can intervene that will make the most difference. Here’s where we’d like to see a lot of growth, where there’s a lot of work in terms of learning analytics, predictive analytics and more customized, personalized learning. [This is] helping more students more quickly, more efficiently, more effectively gain mastery of the knowledge they need in order to graduate and be successful.

5. Is there anything you’d like to add about the value of efficiency to growing institutions and what efficiency looks like in the postsecondary context?

The very term ‘efficiency’ is a little bit of a hot-button term in higher education. When we’re talking about it, sometimes it might rub some people the wrong way. It might be too closely aligned with business and industry, and many people within the academic culture see themselves in a completely different realm.

What we’re talking about here, we might be able to frame it a little differently. We’re trying to be data informed; we’re trying to make data-informed decisions that help us drive toward our ultimate outcomes. And, again, those ultimate outcomes are about academics, they’re about learning and they’re about people. Keeping all those things together in the same conversation is very important in order for us to move this conversation forward.

This interview has been edited for length.

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Key Takeaways

It’s critical for postsecondary leaders to quash the misconception that efficiency-related changes necessarily lead to staff layoffs.

Operational efficiency is critical to helping staff and faculty focus on the high-value, high-touch tasks that make a real difference for students.

Readers Comments

I like the point Sandeen makes right at the top that academic and back-office functions are one in the same. Strong back-end functions allow the academic side to soar, and a strong academic side requires a healthy back-end.

Wow, this came up early! I was waiting for someone to make a comment like this. Just because the bureaucratic processes are unsexy doesn’t make them useless. As Jennifer Long said, along with Cathy, the two are significantly linked. A strong bureaucracy makes everything run better – it makes students happier and more able to focus on studying, it allows teachers to focus on teaching. So, in a very direct way, investing in the bureaucratic functions of the institution is an investment in “instructional capacity”.

‘Efficiency’ has become such a buzzword for admins looking to convince their stakeholders that they are making real change and not wasting resources on frivolous expenses at the cost of their faculty. Let’s focus on student success instead of the good PR that this newfound ‘efficiency’ can bring.